Seoul: Global credit rating agency, AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of ‘a’ (Excellent) of South Korea’s KB Insurance Co Ltd (KBI), with a stable outlook.
According to BERNAMA News Agency, the credit ratings reflect KBI’s balance sheet strength, which was assessed as strong, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management. The ratings are bolstered by the support KBI receives from its parent company, KB Financial Group Inc (KB Group), and its strategic importance to the parent.
The global credit rating agency emphasized KBI’s risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio. The company’s local solvency ratio remains largely in line with the industry average despite a decline in market interest rates and discount rate cuts by the local regulator.
KBI shows good accessibility to the capital market, underpinned by its recent and past successful subordinated debt issuances, while maintaining low debt leverage and healthy coverage ratios. Its conservative asset-liability management approach continues to fortify its financial resilience.
AM Best assesses KBI’s operating performance as adequate, with return-on-equity and combined ratios comparable to domestic industry peers. The company’s long-term insurance segment is expected to benefit from the release of its sizable contractual service margin base, although profitability may be tempered by rising medical claims across the sector in 2025.
The auto insurance line remains under pressure from prior base rate cuts and inflation-driven repair costs. However, KBI is expanding its online sales channels to achieve scale and improve efficiency, even as short-term costs rise in a competitive market. Interest income continues to be the primary contributor to investment profits.
Holding around 13 per cent market share in 2024, KBI is the fourth-largest non-life insurer in South Korea, underscoring its strategic value to KB Group. It remains the group’s only non-life insurance arm, playing a key role in diversifying the conglomerate’s financial services portfolio.
Since its affiliation with KB Group in 2015, KBI has received both explicit and implicit support, including direct capital injections and a no-dividend policy between 2019 and 2022 to strengthen its capital base, along with shared branding and distribution resources.